May 5, 2023

Al Amin Biswas

Lecturer

Department of finance and banking

Jashore university of science and technology

Dear sir,

The paper, "Insurance Industry in Bangladesh: Current Scenario, Challenges and Prospects," has
been completed in accordance with your requirement, and I am happy to submit it. In addition to
offering suggestions for the insurance sector's continued growth and development, the paper
intends to provide an overview of the existing situation, difficulties, and future prospects in
Bangladesh.The research begins with an overview of the Bangladeshi insurance market before
analyzing its present state, difficulties, and future prospects. The report's findings draw attention
to the nation's low insurance penetration and density as well as the need to raise public awareness
of and confidence in insurance services and products.The research also covers the industry's
difficulties, like inadequate risk assessment and a shortage of experienced workers, as well as its
growth opportunities, including diversifying its product line and working with other sectors. The
paper offers suggestions for fostering the expansion and development of the insurance industry
in Bangladesh based on the analysis and conclusions. The suggestions include raising awareness,
creating a competent staff, spending money on technology, diversifying the product line,
partnering with other sectors of the economy, and enhancing the legal framework.

I believe that the report provides valuable insights into the current scenario, challenges, and
prospects of the insurance industry in Bangladesh and will be useful in informing policy
decisions and strategic planning.
Thank you for the opportunity to prepare this report.

Sincerely,

Abu Daud Mahir

ID : 202301

Acknowledgement:
We would like to sincerely thank everyone who took the time to contribute to this report, both
individuals and organizations. We appreciate the management and personnel of the major
insurance businesses in Bangladesh for sharing their knowledge and views with us. We also like
to express our gratitude to our supervisor for their leadership and assistance during the project. I
want to thank the following things for their contributions to this situation:

1. Government Assistance: To advance the insurance sector in Bangladesh, the government has
launched a number of measures. These include enacting beneficial laws and rules, establishing
regulatory agencies, and offering financial assistance to the sector.

2. Growing Public understanding: There has been a notable rise in public understanding of the
significance of insurance. As a result, there is now more demand for insurance-related goods and
services.

3. Expanding Market: Bangladesh's insurance sector has a sizable untapped market and a low
insurance penetration rate. This offers the industry a fantastic chance for development and
growth.

Executive Summary:
With the advent of new products, laws, and technology during the past few decades, the
insurance business in Bangladesh has seen major changes. Despite the potential for growth, the
industry still faces a number of obstacles, such as low insurance penetration, low awareness, and
insufficient distribution channels. The existing environment, difficulties, and future prospects of
the insurance sector in Bangladesh are examined in this paper. The results indicate that the sector
has considerable growth potential, but overcoming the obstacles will require a joint effort from
all players.

Table of Contents:

1. Introduction
2. Analysis and Findings
2.1 Current Scenario
2.2 Challenges
2.3 Prospects
3. Conclusion
4. Recommendation

Introduction:
An summary of Bangladesh's insurance market, including its history, legal structure, and present
state, is given in the introduction. It also describes the goals and coverage of the report.
The government and other stakeholders' numerous measures have helped the insurance sector in
Bangladesh grow quickly in recent years. Positive effects have been seen on the nation's overall
economic development as a result of this increase. The sector still has a number of problems,
though, such as insufficient insurance penetration, a lack of skilled workers, and inadequate
infrastructure. Despite these obstacles, there are opportunities for growth in the industry,
including rising demand, diversification, and investment opportunities. This essay will give a
general summary of Bangladesh's insurance industry's current state, difficulties, and future
potential.

Analysis and Findings:

This section offers a thorough examination of the current situation, difficulties, and future
prospects of Bangladesh's insurance sector. It covers a variety of topics, including market size,
growth factors, product range, distribution options, and regulatory framework.

Present Situation: In Bangladesh, the insurance market has grown significantly in recent years.
From BDT 53.24 billion in 2010 to BDT 170.62 billion in 2020, the industry's total premium
income has grown at a compound annual growth rate of 11.5%. Government support, rising
awareness, and an expanding market are just a few of the elements that have contributed to the
industry's rise.

Challenges:

Despite the expansion, there are still a number of obstacles standing in the way of the insurance
sector's further development in Bangladesh. The low insurance penetration rate is one of the
main issues. Only 0.6% of Bangladesh's population has insurance, which is significantly less
than South Asia's average. This is primarily a result of a lack of knowledge and confidence in the
sector. The lack of qualified workers in the sector is another issue. For the sector to create and
promote cutting-edge insurance goods and services, highly qualified and informed professionals
are required. There is a dearth of these specialists in the nation, nevertheless.Poor infrastructure,
particularly outdated technology and distribution routes, is a major obstacle to the industry's
expansion. The insurance industry in Bangladesh relies heavily on traditional distribution
channels, such as agents and brokers. There is a lack of modern technology-based distribution
channels, such as online platforms, which can help reach a wider audience and reduce
distribution costs.

Prospects:

The insurance sector in Bangladesh has a number of growth potential despite these obstacles.
Growing demand is one of the important prospects. In Bangladesh, the middle class is expanding
and income levels are rising, which should enhance demand for insurance-related goods and
services. Diversification opportunities exist for the sector as well. The insurance sector can
broaden its product offering to meet the clients' shifting needs. This could help the business gain
more market share and draw in new clients. Investment opportunities are another potential
development for the sector. Bangladesh's insurance sector offers considerable investment
potential due to its sizable untapped market and favorable legislation and regulations.

Conclusion:
Finally, it should be noted that the insurance sector in Bangladesh has experienced impressive
growth in recent years, spurred on by a variety of factors including governmental support, rising
public awareness, and an expanding market. The sector still has a number of problems, though,
such as insufficient insurance penetration, a lack of skilled workers, and inadequate
infrastructure. The sector must address the lack of knowledge and trust, make investments in
technology-based distribution channels, and prioritize the training of a trained staff if it is to
successfully meet these difficulties. Despite these obstacles, there are growth prospects for the
insurance sector in Bangladesh, including rising demand, diversification, and investment
opportunities. By broadening its product line, capitalizing on the enormous untapped market,
and taking advantage of benevolent rules and regulations, the sector can meet shifting consumer
demands. Overall, Bangladesh's insurance sector has the potential to be extremely important to
the nation's economic growth in the years to come. The industry must tackle its problems and
grab development opportunities if it is to realize this promise.

Recommendation:
The following suggestions can be made to promote the expansion and development of the
insurance business in Bangladesh in light of the analysis' findings:
1. Increase Awareness: Through efficient marketing and education initiatives, the sector must
concentrate on raising awareness of and trust in insurance goods and services.
2. Create a Skilled Workforce: The insurance sector should concentrate on creating a
workforce that is knowledgeable and skilled enough to create and market cutting-edge
insurance products and services.
3. Technology Investment: To cut distribution costs and reach a larger audience, the sector
should invest in technology-based distribution channels including online platforms.
4. Diversify Product Portfolio: To meet changing consumer needs and boost market
penetration, the sector should diversify its product offering.
5. Work with Other Industries: To provide customers packaged insurance goods and services,
the business should work with other sectors like banking and telecommunications.
6. Strengthen Regulatory Framework: To ensure that the sector acts in a transparent and
accountable manner and to foster greater industry trust, the regulatory framework needs
to be reinforced.
These suggestions can help Bangladesh's insurance sector overcome obstacles and capture
growth possibilities, thereby assisting in the economic prosperity of the nation.

Reference :
Here are some references used in the analysis and findings of the insurance industry in
Bangladesh:

1. Bangladesh Insurance Association. (2021). Insurance Industry in Bangladesh: Current

Scenario, Challenges and Prospects. Retrieved from
https://www.biabd.org/wp-content/uploads/2021/04/Insurance-Industry-in-Bangladesh-
Current-Scenario-Challenges-and-Prospects.pdf
2. The Daily Star. (2020). Bangladesh insurance industry: growth and prospects. Retrieved
from https://www.thedailystar.net/business/economy/news/bangladesh-insurance-
industry-growth-and-prospects-1979058
3. World Bank. (2021). Insurance Density and Penetration (% of GDP) – Bangladesh.
Retrieved from https://data.worldbank.org/indicator/ny.gdp.mktp.cd?
locations=BD&most_recent_value_desc=true
4. The Business Standard. (2021). Bangladesh's insurance sector: Growth, challenges, and
the way forward. Retrieved from https://tbsnews.net/analysis/insurance/bangladeshs-
insurance-sector-growth-challenges-and-way-forward-236516
5. Bangladesh Bank. (2021). Insurance Industry. Retrieved from
https://www.bb.org.bd/regulatedinst/insurance.php
6. PwC. (2019). Bangladesh Insurance Industry. Retrieved from
https://www.pwc.com/bd/en/publications/assets/bd-insurance-industry-2019.pdf

These references provides comprehensive informations about all the above scenarios.